The budget that runs from 2014-2020 will cap spending at $1.3 trillion, The Wall Street Journal reported Wednesday.
It is the first time lawmakers for the EU have voted for a smaller overall budget and it represents a victory for Germany, Britain and the Netherlands, which have advocated for spending less, the Journal said.
The cuts were less than the $250 billion reduction Britain was seeking.
The proposal passed with a 537-126 vote that included 19 abstentions.
"One single year's budget represents more money -- in today's prices -- than the whole Marshall Plan in its time," said EU President Jose Manuel Barroso.
He said the budget, which comes to 1 percent of the region's gross domestic product, would "help to strengthen and sustain the [economic] recovery under way across the European Union."